Apple says content providers like record companies, TV networks and movie studios are to blame

Apple, Microsoft and Adobe are currently being questioned for the high prices they charge Australians for digital products, but Apple accused traditional content distributors like record companies for the price hikes.

An Australian parliamentary committee is investigating Apple, Microsoft and Adobe for charging Australian customers around 50 percent more for digital products (and sometimes hardware) than customers in other areas of the world -- including the U.S.

Tony King, vice president for Apple Australia, New Zealand and South Asia, said that traditional content providers like record labels, TV networks and movie studios are to blame because digital pricing is based on wholesale costs set by these content holders.

"The content industry still runs with perhaps old-fashioned notions of country borders or territories or markets," King said. "The cards are in the hand of the folks who own the content, that is not in our hand to play."

Apple, Microsoft and Adobe also said that prices are higher in Australia because of higher labor costs, copyright issues, geographical product differentiation and Australia's 10 percent goods and services tax.

A survey by consumer advocacy group Choice showed that both hardware and software sold in Australia were priced 50 percent higher than the same items in the U.S.

While King pointed out that products like the iPad mini and Final Cut Pro software were the same price in Australia as the U.S., other products clearly are not. For instance, albums like Justin Timberlake's "20/20 Experience" and AC/DC's "Back in Black" on iTunes are priced 50 percent and 70 percent higher in Australia compared to the U.S. respectively.

For Adobe, Australians have to pay A$3,175 ($3,300 USD) for CS6 Design and Web Premium software while Americans pay just $1,899.

On Microsoft's end, the committee said that Australians pay A$4,136 for the same products that Americans pay the equivalent of A$2,324 for.

Not passing judgement on either practice but I do find it ironic that companies defend region-based pricing yet espouse the virtue of globalization when it comes to the labour market, chasing the lowest wage where it can and when it is feasible. More applicable to manufacturing, but also call centers and more and more code shops.

I do find their excuses lame on the price discrepancy. Certainly not enough to make up the 50% price difference, but then its something I am also used to here in Canada. Our dollar is about par with the US but many things are so much cheaper in the US. Thankfully I am a 40 min drive from the border and can get stuff drop-shipped to the UPS store and pick it up for a $5 fee.

That I can order stuff, drive about 120km round trip in gas costs, pay a $3 toll bridge, pay duty and taxes on my purchase coming back and still save money means someone is making bank based on an artificially imposed geographical limitation.

I do realise this is in part to save their "authorized" distributors in some cases who pay for the right to distribute goods in a certain geographic area and perhaps once served a purpose but the internet and efficient shipping with centralised warehousing means those distributors will quickly become a thing of the past, assuming too many road blocks don't get put up to save them.

"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA